• Proposes 20% investment limit on exposure to single issuer
Adedayo Akinwale in Abuja
The House of Representatives has called for a comprehensive overhaul of Nigeria’s trustee investment legal framework, describing the existing law as outdated and inadequate to address the realities of the country’s evolving financial and capital markets.
The Speaker, Hon. Abbas Tajudeen, made the call on Monday in Abuja during a public hearing on the Trustee Investment Bill, 2026, which seeks to repeal and re-enact the existing Trustee Investment Act, with provisions expanding permissible investment opportunities while introducing stricter safeguards against excessive investment risks.
He said the investment landscape had changed considerably since the enactment of Nigeria’s Trustee Investments Act of 1957, with the expansion of capital markets, the emergence of sophisticated financial instruments and new opportunities for investment and wealth creation making a review of the legislation necessary.
The Speaker, who was represented by Hon. Dahiru Sarki, said the proposed legislation presented an opportunity to establish a modern legal framework that would accommodate contemporary investment opportunities while strengthening the protection of trust assets and the interests of beneficiaries.
He stated: “The law governing the investment of trust funds carries responsibilities that extend beyond financial management, as it concerns the protection of property, preservation of family wealth and the security of individuals and institutions whose interests depend on the prudent management of entrusted assets.
“Behind every trust may be the inheritance of a child, the security of a widow, the resources of a charitable institution or the accumulated wealth of a family. The law must ensure that these interests are adequately protected.”
Abbas noted that the existing legal framework had failed to keep pace with developments in the financial sector, stressing that reform was both necessary and timely.
He, however, cautioned that the proposed reform must strike a balance between protecting trust assets and allowing trustees to generate reasonable returns for beneficiaries.
He warned that an excessively restrictive investment framework could deny beneficiaries legitimate opportunities for wealth creation, while inadequate regulation could expose their assets to imprudent investment decisions and avoidable risks.
According to him, “The challenge is to strike the right balance between preserving trust assets and enabling reasonable returns on investment. An excessively restrictive framework may deny beneficiaries legitimate opportunities for growth, while an inadequately regulated one may expose their assets to imprudent decisions and avoidable risks.”
The Speaker stressed that the Bill seeks to address these concerns by replacing the existing framework with a more comprehensive regime for the investment of trust funds, including an expansion of permissible investment opportunities to reflect contemporary financial realities and the need for greater diversification.
Abbas added: “The governing principle must remain unmistakable: trustees hold assets for the benefit of others, not for their personal advantage. Their decisions must therefore be guided by prudence, integrity, transparency and an overriding commitment to the interests of beneficiaries.
“Modernisation must never become a licence for speculation or a justification for exposing trust property to unreasonable risks.”
Beyond protecting individual and institutional beneficiaries, the Speaker said the proposed reform also had significant implications for Nigeria’s economic development, particularly in mobilising long-term domestic capital for infrastructure development, expansion of productive capacity and enterprise growth.
He noted that Nigeria required substantial long-term capital to address its infrastructure deficit and stimulate economic activities, adding that a credible framework for managing trust investments could contribute to deeper capital markets and more effective mobilisation of domestic resources.
However, to strengthen the management of trust funds and protect beneficiaries from financial losses, the House Committee on Capital Market and Institutions has proposed a 20 per cent investment limit on exposure to a single issuer.
The Chairman of the Committee, Hon. Solomon Bob, disclosed that a proposed 20 per cent limit on investment in a single issuer was intended to minimise concentration risk and prevent the exposure of entire trust portfolios to the financial difficulties of one institution.
He stressed that the proposed expansion would provide trustees with a wider range of investment opportunities, allowing them to diversify portfolios and potentially improve returns for beneficiaries.
The chairman added that the proposed 20 per cent limit on investment in a single issuer was intended to minimise concentration risk and prevent the exposure of entire trust portfolios to the financial difficulties of one institution.
He described the proposed diversification requirement as a critical measure to prevent excessive concentration of trust assets in one investment.
Bob said the existing Trustee Investment Act, which dates back to 1957, was enacted when Nigeria’s financial system was considerably less developed and the country’s investment opportunities were limited.
He noted that the financial landscape had changed significantly, with Nigeria now having a capital market valued at over N80 trillion, pension assets exceeding N30 trillion and several emerging investment opportunities, including Real Estate Investment Trusts (REITs), infrastructure funds and green bonds.
Bob stated: “Today, we have a sophisticated capital market worth over N80 trillion, pension assets over N30 trillion, and new asset classes from REITs to Infrastructure Funds to Green Bonds. The world has moved. Our law has not. This hearing is to correct that.
“The proposed legislation is designed to bring the legal framework governing trust investments in line with contemporary financial realities while ensuring that trustees operate within clearly defined investment and accountability standards.”
Under Clause 3 of the proposed bill, the committee chairman said the investment universe would be expanded to accommodate corporate bonds, equities, collective investment schemes, including Exchange Traded Funds (ETFs) and REITs, infrastructure funds, real property, foreign investments through licensed custodians, private equity, regulated virtual assets and environmental, social and governance (ESG)-compliant bonds.
The bill also seeks to strengthen the fiduciary obligations of trustees through Clause 5 by expressly incorporating the principles of loyalty, prudence, care and impartiality.
Under the proposed provision, trustees would be required to exercise the same level of prudence expected of individuals managing their own financial affairs, while prioritising the interests of beneficiaries.
However, Bob expressed displeasure over the poor attendance of government agencies and other institutions invited to a public hearing.
He lamented that only three of the approximately 12 institutions invited by the committee attended the public hearing, accusing the absent institutions of failing to take the lawmaking process seriously.
The institutions that attended were the Securities and Exchange Commission (SEC), the Debt Management Office (DMO) and the Association of Corporate Trustees. They made submissions and offered recommendations towards the proposed legislation.
The committee chairman said he was disappointed that most of the invited institutions ignored the invitation, despite the importance of their contributions to the legislative process.
He stressed that lawmaking remained central to any meaningful effort aimed at advancing advocacy, introducing reforms and improving the lives of Nigerians.